Comparing Cost-Sharing

Cost-sharing: Paying for Health Care

When you receive health care services, you and your health plan usually share the cost. The following is a brief description of how cost-sharing works.

Graph explaining how deductibles, coinsurance, and out-of-pocket limits work.

Example 1: Deductibles
Most plans have a deductible. This is the amount of covered health care costs you must pay on your own before your insurer will begin sharing the costs. Even though your insurer isn't sharing the cost, these expenses must be covered services received in-network and billed through your insurer in order to count toward your deductible. Let's say your deductible is $2,500. If a doctor bills you $100 for a visit and lab work and you have not yet met your deductible, then you would pay the whole bill yourself. (Remember that some services, like preventive care, are covered without having to meet your deductible).

  • Refer to Page 1 of your plan's summary of benefits and coverage for details about your deductible.
  • Some plans exempt certain services, like doctor visits, from the deductible; other plans may apply a separate deductible to certain types of services (prescription drugs, for instance).

Example 2: Coinsurance
After you meet your deductible you will begin paying copayments and coinsurance. Copayments are a flat amount you must pay, regardless of the total cost of the service. In most plans, after you meet the deductible you'll have to pay a copay each time you see a doctor. Coinsurance is the percentage of costs you are responsible for after you've met your deductible, but before reaching your out-of-pocket limit. For instance, let's assume you've met your deductible and you need surgery that costs $10,000. If your coinsurance is 25 percent, you would owe $2,500. Your plan would pay the other 75 percent, or $7,500.

  • Refer to your plan's summary of benefits and coverage starting on Page 2 for copay and coinsurance amounts.
  • Copays may vary depending on the service (primary care versus specialist care).
  • Coinsurance usually only varies for services received in-network versus out-of-network.

Example 3: Out-of-pocket Limits
Plans also have an out-of-pocket limit. Let's say your out-of-pocket limit is $5,000. After spending $5,000 out of pocket, your insurer would then begin paying 100 percent of the cost for your covered in-network medical care. Only the portion of the costs that you actually pay counts toward your out-of-pocket limit. For instance, in the example in No. 2 above, only the $2,500 that you paid would count toward the limit.

  • Refer to Page 1 of your plan's summary of benefits and coverage for out-of-pocket limits.

Note: Premiums, balance billing, and health care not covered by your plan generally do not count toward your deductible or out-of-pocket limit. Most plans have a separate deductible and out-of-pocket limit for out-of-network claims. If you are balance billed for emergency treatment or for treatment you received because your health plan didn't have a preferred provider available, tell your plan how much you paid, so that it can be counted toward your in-network cost-sharing.

Metal Levels

Metal levels are a way to make "apples-to-apples" plan comparisons. They refer to the percentage a health plan will pay, on average, for care across a standard population. For instance, a Bronze plan pays 60% of covered health care costs, on average, and enrollees pay the remaining 40% through cost-sharing (deductibles, copayments, coinsurance, and out-of-pocket limits). Actual percentages will vary based on how you use your insurance through the year.

Metal Levels: Plan Pays / You Pay
Bronze Sliver Gold Platinum
60% / 40% 70% / 30% 80% / 20% 90% / 10%

Plans that pay higher percentages generally have higher premiums. If you expect to need a lot of health care services, a Gold or Platinum plan might save you money in the long-run. If you don't expect to need a lot of health care services, a Bronze or Silver plan might be a good choice. However, you should set aside money to ensure you can afford the cost-sharing when you need care.
Learn more about metal levels

Health Savings Accounts

Some plans offer a health savings account, which allows you to set aside money tax free for your out-of-pocket health care costs.
Learn more about Health Savings Accounts

Comparing Costs and Cost-sharing

  • Be sure to compare network coverage between plans to minimize balance billing.
  • Having a higher deductible may lower your premium but can cost you more money in the long-run if you have frequent medical visits.
  • Having a lower deductible may increase your premium but can save you money in the long-run if you have frequent medical visits.
  • Having a Bronze or Silver plan may lower your premium but you should be prepared to pay out-of-pocket for any health care before you meet your deductible.
  • Having a Gold or Platinum plan may increase your premium but will reduce the amount you will owe out-of-pocket when you need care.

Other important sections:

Know Your Documents | Avoiding Surprise Bills | Handling Surprise Bills

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Last updated: 10/12/2015